Thresholds for mortgage disclosures data collection, TILA escrow requirements raised

Asset-size thresholds will be raised for exemptions from home mortgage disclosure data collection and requirements to establish escrow accounts for higher-priced mortgage loans under two final rules issued by the Consumer Financial Protection Bureau (CFPB) Thursday.

The final rules amend the official commentaries interpreting the requirements of the bureau’s Regulation C (Home Mortgage Disclosure Act) and those for its Regulation Z (Truth in Lending Act).

For the Reg C changes, the exemption threshold is adjusted to increase to $45 million (from $44 million), meaning banks, savings associations, and credit unions with assets of $45 million or less as of Dec. 31 are exempt from collecting data in 2018.

For the Reg Z changes, the exemption threshold is adjusted to increase to $2.112 billion from $2.069 billion. Creditors with assets of less than $2.112 billion (including assets of certain affiliates) as of Dec. 31 are exempt, if other requirements of Regulation Z also are met, from establishing escrow accounts for higher-priced mortgage loans in 2018, the bureau said.

“This asset limit will also apply during a grace period, in certain circumstances, with respect to transactions with applications received before April 1 of 2019,” the bureau said in filings with the Federal Register. “The adjustment to the escrows asset-size exemption threshold will also increase a similar threshold for small-creditor portfolio and balloon-payment qualified mortgages.”

The agency added that balloon-payment qualified mortgages that satisfy all applicable criteria, including being made by creditors that have (together with certain affiliates) total assets below the threshold, are also excepted from the prohibition on balloon payments for high-cost mortgages.

The changes are based on the annual percentage change in the average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) – in this case a 2.1% increase in the average of the CPI-W for the 12-month period ending in November 2017.

Home Mortgage Disclosure (Regulation C) Adjustment to Asset-Size Exemption Threshold

Truth in Lending Act (Regulation Z) Adjustment to Asset-Size Exemption Threshold: Official Interpretation